With education, success was in the bag
Silicon Valley Business Journal – by Becky Bergman
Jordana McVey was surprised when an all-out search for a hip knitting handbag that could compartmentalize a cell phone, wallet, sunglasses and keys turned up only bulky granny-style totes with wooden handles. Given the knitting fever swirling around Gen-Xers in recent years, it seems like the hunt should have been short-lived. But Ms. McVey didn’t find her bag until she designed it herself.
As a San Jose State University marketing major, Ms. McVey combined $5,000 from her savings with her entrepreneurial find-it-or-create-it spirit to start Jordana Paige, a handbag company that custom designs, manufacturers, markets and sells a variety of trendy purses and totes for knitting hobbyists.
By the time she graduated with a business degree in 2005, her company had grown from $25,000 in sales in 2003 — its first year of operations — to $100,000 in 2005. Now the 22-year-old San Jose entrepreneur, who runs Jordana Paige out of her apartment, plans to apply for a $50,000 loan and wants to expand her product line to include yarn and knitting patterns.
Ms. McVey, who credits the school’s entrepreneurship center with teaching her how to launch, finance and run a company, is part of a growing number of business owners who have turned to universities as the place to gain start-up experience.
More than 300 four-year institutions offer courses in entrepreneurship designed for students not enrolled in the business school, while the number of entrepreneurship departments has increased from seven in 1999 to 18 in 2006, according to the Ewing Marion Kauffman Foundation, which partners with private entities to promote entrepreneurship among children and youth.
Approximately 2,100 two- and four-year colleges and universities — including SJSU, Santa Clara University and Stanford Graduate School of Business — offer at least one course in entrepreneurship, up from about 300 during the 1984-85 school year, making it the fastest-growing course of study on campuses across the country.
Since 2003, the Silicon Valley Center for Entrepreneurship at SJSU has offered courses for both undergraduate and graduate students. Classes range from new venture marketing to financial management. The center also hosts a Neat Ideas Fair and an annual Business Plan Competition.
“The winner of our first Business Plan Competition started a company that makes water filters from used tires,” says Anuradhu Badu, director for the Silicon Valley Center for Entrepreneurship. “Some students have started fashion-related businesses working with garments, purses and organizing fashion shows. One has started a leisure and cruise company. Two are in the biotech/medical equipment field. A few are in the restaurant and catering industry.”
A 2003 study at the University of Arizona’s Karl Eller Center-Berger Entrepreneurship Program showed that five years after graduation, the average annual income for entrepreneurship majors and MBAs who concentrated in entrepreneurship at the school was almost $72,000 — or 27 percent higher — than for other business majors and students with standard MBAs.
The study, “Impact of Entrepreneurship,” also revealed that entrepreneurship grads were three times more likely to form new companies. Even the entrepreneurs who opted for a job instead of launching a company earned bigger paychecks: $23,500 more a year on average than for other business graduates, according to Gary Libecap, co-author of the study.
“I think a mistake a lot of people make is getting into something they’re not ready for,” says Ms. McVey. “They think since they’re the boss, life is great. But the reality is you have to put a lot of time and commitment into making it work.”
In the 20 years since it first became mainstream, scholars, school leaders and business owners have asked the same question: Is it possible to learn entrepreneurship in a classroom?
“We don’t teach entrepreneurship,” said Linda Wells, executive director at the Center for Entrepreneurial Studies at Stanford, which nurtures 8 to 15 fledgling startups every year. “We show them the process and skill-set. The students bring their unique ideas and dedication and it’s our job to demystify the process of starting and running a business.”
Nike founder and Stanford alumnus Phil Knight recently donated $105 million to help the school build a new 340,000-square-foot campus for the business school, making this the largest donation of its kind in the country. Ms. Badu says SJSU’s entrepreneurial center received $15,000 for its Business Plan Competition.
Entrepreneurship is about having guts and passion, something a prospective business owner is not going to find in a textbook. It’s about access to consultants with experience, venture capitalists willing to part with a few dollars on a new idea and networking with other like-minded students, according to recent graduates.
“I was afraid my experience at Stanford was going to be a country club, back-slapping ordeal,” says Fullpro.com founder and 2005 alumnus Erik Mikysa. “Instead, it was like being a kid in a candy store; I was surrounded by people who had the same interest I did. My classmates were incredibly smart and self-driven and provided a networking opportunity that broadened my horizons.”
Unlike Ms. McVey, the self-confessed serial entrepreneur says he will sell his company, which manufacturers SoundVision safety glasses, within the next two years, He has another company in the works. For Alyssa Rapp, co-founder of Bottlenotes, a customized wine club offered Netflix-style, Stanford’s networking paid off in more ways than she expected.
Her company’s board of directors includes winemaker Jack Cakebread and Netflix co-founder Jim Cook. Among its success so far was the launch of “Limited Addictions,” an exclusive invitation to sample limited production wines from boutique producers worldwide.
“While co-chairing the Stanford Business School Wine Circle, I was continually impressed by how much fun my classmates and I had tasting wine together and learning about wine and wine regions from each other,” says Ms. Rapp. “During that time, I also accrued stacks and stacks of tasting notes. These experiences inspired me to create a wine club service that would give wine-loving friends the opportunity to continue to learn about the world of wine.”